Refund of Excisy duty paid

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Rajpreet Singh (Querist)
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18 March 2009 Dear Sir,
we are the suppliers of auto parts to a party located in special economic zone who is claiming exemption from excise duty, Sir if we can remove our supplies to the party without payment of excise duty if yes under what provisions of the excise laws. We removed certain supplies after payment of excise duty for which our customer has not taken cenvat credit of that amount. Out of that supply certain materials are returned back to us on the cover of a debit note. Now the situation is that we cannot take cenvat credit of the returned goods because it is not under the cover of an invoice and our customers is not willing to return the goods under the cover of an invoice coz it is exempted unit. Sir my second question is can we claim refund of excise duty on these returned goods because we have not transferred the incindence of tax to the customers as he has not taken cenvat credit. Party will not pay us even for the excise duty on the returned goods although this we had pocketed out to the revenue. Please advice

Rajesh Kumar

Rajesh Kumar (Expert)
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18 March 2009 On returned goods you can take credit under Rule 16 of Central Excise Rules, based on your own invoice.
The supply to SEZ is treated as export, and the goods should be cleared on ARE-1 under bond. When the goods will enter the SEZ, the custom officer there will endorse the ARE-1 and that will act as proof of export.
If you want to take some export benefits on your export to SEZ, you will need to file Bill of exports while supplying to SEZ.